State-run Power Grid Corp of India has approached the central electricity regulator seeking cancellation of two power transmission lines contract awarded to Reliance Infrastructure. The company bagged the Rs 4,100-crore projects in 2009. Power Grid Corp has told the Central Electricity Regulatory Commission (CERC) that Reliance Infrastructure has not yet begun work on the projects — Talcher-II transmission system and North Karanpura transmission project — which is affecting construction of other connecting lines, sources in Power Grid and CERC said.

"We have filed a petition in CERC asking for cancellation of Reliance Infrastructure's transmission lines and awarding it to someone else. These lines have to be built on urgent basis as a lot of generation capacity has been added and new plants are coming up. Transmission lines are inter-dependent and hitch at one place affects the entire stretch," a senior Power Grid official, who did not want to be identified, said.

The matter is scheduled for hearing by the regulatory commission on September 10, a CERC official said. Reliance Infrastructure did not respond to emailed queries from ET. Shares of Reliance Infrastructure closed at Rs 335,50, up1.84 %, on the Bombay Stock Exchange. In May this year, the commission had set aside petitions of Reliance Infrastructure on cost escalation.

The company had asked for relief of nearly Rs700 crore for the two projects citing cost and time overruns due to delays in grant of authorisations by the government. In response, CERC had asked the company to approach beneficiary states for extension of commissioning schedules of the two projects. Reliance Infrastructure has moved the Appellate Tribunal of Electricity against the regulator's order.

Reliance had argued that delay in grant of the authorisation by the power ministry affected implementation of the projects, since it was unable to draw funds and could not undertake construction activity. The commission said though authorisations came late, the company had sufficient time to commence construction on the project.

The two projects are among the first set of ultra mega transmission projects awarded to private companies. Reliance Infrastructure had bagged the two transmission projects in 2010 under a tariff-based competitive bidding process having quoted the lowest levelised tariffs. The transmission licences were to be valid for 25 years. The North Karanpura transmission project is worth around Rs 2,700 crore while Talcher-II will costRs1,400 crore.

The 1,045-km-long North Karanpura transmission line, envisaged to connect Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Haryana, was to be operational by November this year. The 592-km long Talcher-II transmission project was to cater to Odosha and Andhra Pradesh was scheduled for commissioning by October 2012.